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It’s been a week to forget for South Africa, in which fears emerged that the improvement in the public finances is stalling and concerns about (even more) intense loadshedding surfaced. That was topped off by allegations that South Africa supplied weapons …
12th May 2023
Sovereign dollar bond spreads have widened across Sub-Saharan Africa this week and are signalling further debt distress. In much of the region, spreads over US Treasuries are above or near the 1,000bp-mark – a commonly-used threshold for distress. This is …
5th May 2023
The South African Reserve Bank’s Monetary Policy Review (MPR), published this week, made it clear that the central bank is increasingly incorporating fiscal risks into its interest rate projections and decision making process. The poor state of the public …
28th April 2023
Sticky price pressures strengthening hawks’ hand Recently-released inflation figures out of Sub-Saharan Africa’s two biggest economies are likely to put pressure on policymakers in Nigeria and South Africa to raise interest rates further. March CPI data …
21st April 2023
Glimmers of hope have emerged this week about unlocking the stalemate over the global debt restructuring framework, with encouraging signs for negotiations in Zambia and Ghana. But we fear that the measures considered are more of a workaround that don’t …
14th April 2023
Nigeria’s uphill battle to reverse declining FDI Nigeria’s incoming administration is facing an ever-increasing list of economic challenges, and for many there are no quick solutions are at hand. This is certainly the case for the steady decline in …
6th April 2023
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . Central banks re-upping the pace of tightening Central banks in South Africa, Kenya and Ghana all delivered more aggressive interest rate hikes this …
31st March 2023
SARB to follow CBN in delivering dovish hike Nigeria’s central bank shrugged off the recent banking sector turmoil and kept its eye firmly focussed on tackling inflation as it hiked interest rates this week and, on balance, we think the South African …
24th March 2023
Strains in the global banking system have roiled financial markets. (For our full coverage and latest insights, visit our dedicated webpage .) While affected banks may be far away from Sub-Saharan Africa and direct exposures seem limited, the global …
17th March 2023
SA cabinet reshuffling no magic bullet The new configuration of South Africa’s cabinet, following this week’s reshuffling, is facing high expectations to turn around the power crisis and with it, the economy. But hurdles abound and we doubt that the …
10th March 2023
Nigeria to take baby steps in pro-market direction The results of Nigeria’s presidential election were quickly challenged by the opposition this week, which is likely to keep investors on tenterhooks. And even once the dust settles, we suspect that …
3rd March 2023
In the final stretch before Nigeria’s elections on Saturday, we answer key questions about the polls and the economic consequences of the vote. All of our election-related research can be found here . What’s at stake? Nigeria is not only Sub-Saharan …
24th February 2023
What does South Africa’s budget hold in store? South Africa’s mounting economic and political challenges, including the deepening energy crisis, set the stage for the fiscal scales to tip towards providing more support and away from fiscal consolidation …
17th February 2023
South Africa: SONA or SO-NO? The declaration of a state of disaster in South Africa’s State of the Nation Address (SONA) over the deepening energy crisis has grabbed the headlines. Yet, in the small print, there were signs of a meaningful shift away …
10th February 2023
South Africa’s upcoming State of the Nation Address will undoubtedly focus on addressing the energy crisis. But there’s little that the government can do to ease power cuts in the near-term before measures to improve electricity availability kick in down …
3rd February 2023
In the latest of our Election Watch series ahead of Nigeria’s polls, we dissect the near-term economic challenges facing the next administration. Boosting oil production, overhauling the foreign exchange regime and placing the public finances on a more …
South Africa’s manufacturing PMI remained essentially unchanged, at 53.0, in January, but while the breakdown provided mixed messages, we think that the underlying picture for the manufacturing sector and the broader economy remains very downbeat. …
1st February 2023
China under fire for delays to Zambia’s debt deal Delays to Zambia’s debt restructuring threaten to hold up the country’s IMF deal and add to the signs that the Common Framework isn’t fit for purpose. Officials in Zambia had hoped that a sovereign debt …
27th January 2023
Nigeria’s loan-to-bond swap up in the air Plans by the government of Nigeria to swap central bank loans to bonds have hit a sticky patch, making it unclear whether the country can reap the associated economic gains. Parliamentarians in Nigeria have …
20th January 2023
At a key policy conference, South Africa’s ruling party officials offered little by way of new ideas to address the country’s mounting economic challenges. And some fresh proposals risk making matters worse. The ruling African National Congress (ANC) …
13th January 2023
Sub-Saharan Africa’s grim year ahead Last year ended with the bang of Ghana’s sovereign default , and 2023 has started with economies bracing for disruptions due to the end of zero-COVID in China and a looming global recession. While these are likely to …
6th January 2023
2022 will be a year to forget for most African economies – one marked by a slowdown in growth, tighter external financing conditions and balance sheet strains. This culminated in Ghana opting to default on much of its external debt earlier this week. …
23rd December 2022
Ramaphosa still in, De Ruyter out, economy down This week, South Africa’s president dodged impeachment and is likely to be re-elected as leader of the ruling ANC party over the weekend, but the country’s economic challenges have only grown. Early this …
16th December 2022
SA’s politics, Eskom, growth and debt conundrum South Africa’s political upheaval took a breather this week but fears about the state electricity company, Eskom, have grown. Problems at Eskom not only pose a threat to economic activity but, if left …
9th December 2022
South Africa’s political turmoil that severely endangered President Cyril Ramaphosa’s position has already shaken the country’s financial markets. In p art, this is related to the prospect of the ruling party attempting to shore up its dwindling support …
2nd December 2022
Untangling Ghana’s fiscal mess? Official statements this week by the authorities in Ghana signalled commitment to restoring fiscal and debt sustainability, and left little doubt that this will include a sovereign debt restructuring. Finance Minister Ken …
25th November 2022
In next week’s MPC meetings in South Africa and Nigeria, inflation concerns are likely to hold sway over economic woes, and we expect both central banks to keep raising interest rates. South Africa’s tightening cycle is likely to continue for some time, …
18th November 2022
SA may have just avoided a technical recession The surprising strength of South Africa’s manufacturing data for September released this week has lengthened the odds that the economy was in a technical recession over Q2 and Q3. Figures released earlier …
11th November 2022
South Africa: strikes loom as wage talks collapse South Africa is on the cusp of large public sector strikes which will deal another blow to the recovery and raise the risk of fiscal slippage a week after the Medium Term Budget Policy Statement (MTBPS). …
4th November 2022
South Africa’s Medium Term Budget Policy Statement (MTBPS) on Wednesday provided further good news on the state of the public finances, but pressure for public sector wage increases is just one of a number of reasons to think that slippage on the latest …
28th October 2022
South Africa’s Medium Term Budget Policy Statement (MTBPS), scheduled for Wednesday, is unlikely to provide the drama that the UK’s “mini-Budget” did, but we suspect that the government will tilt fiscal policy in a looser direction even as officials …
21st October 2022
Nigeria: Buhari administration’s farewell budget The shelf life of Nigeria’s recently presented budget plans is likely to be short with elections due in early-2023 and no guarantee about policy continuity. In a budget speech late last week, …
14th October 2022
The bi-annual Monetary Policy Review (MPR) released this week by the South African Reserve Bank (SARB) bolsters our view that the monetary tightening cycle will continue to take on a distinct path to most other EM central banks. In many ways, the SARB has …
7th October 2022
Political considerations ahead of key elections in South Africa and Nigeria are likely to add to reasons to loosen fiscal policy over the coming quarters. Severe power cuts continued in South Africa this week, which past experience shows will have weighed …
30th September 2022
Policy tightening in Ghana: past, present and future Despite the release of better-than-expected Q2 GDP growth figures in Ghana, the economic outlook remains gloomy as policy tightening to address the country’s debt woes will increasingly bite. Data …
23rd September 2022
Nigeria’s oil output slump typifies economic woes The fall in Nigeria’s oil production in August to a 50-year low, coming alongside the recent drop back in oil prices, reinforces our downbeat view on the economy’s prospects. The OPEC Monthly …
16th September 2022
Zambia: pending debt relief may not be enough Analysis from the IMF this week suggests that, even with debt relief in the pipeline, putting Zambia’s public debt on a sustainable footing will be difficult. We will look in detail at the IMF’s projections …
9th September 2022
Zambia: IMF deal done, debt sustainability next This week’s rubber-stamping of Zambia’s IMF deal is certainly a welcome step but, with crucial sovereign debt restructuring details unknown, it remains unclear if it will prove to be sufficient to place …
2nd September 2022
Another win for Angola’s ruling party President João Lourenço is on course to secure another term following this week’s elections in Angola. With the political backdrop little changed, we think that the economy will revert to its low growth path following …
26th August 2022
Ruto wins, but political risks remain elevated Deputy President William Ruto was this week declared winner in Kenya's presidential election, but the result is being challenged and the threat of violence lingers. Even if that is avoided, Mr. Ruto will …
19th August 2022
Political risks around Kenya’s elections still high The fact that Kenya’s elections have, so far, proceeded peacefully have supported a rally in the country’s bond market. But with no official results available yet and reports pointing to a tight race, …
12th August 2022
Zambia’s latest step towards debt sustainability News that Zambia’s official creditors agreed to provide debt relief is certainly encouraging and will unlock IMF funding. But the terms of the deal remain unknown, leaving in doubt that the country’s public …
5th August 2022
Nigeria’s budget woes Data published by Nigeria’s Budget Office this week highlighted that, despite what should be a favourable high oil price environment, the public finances are actually getting worse. The figures showed that the federal government …
29th July 2022
Tanzania, Kenya secure IMF funds The approval this week of an IMF package for Tanzania and the latest disbursement of a loan for Kenya will ease near-term balance of payments pressures. The Fund has pushed fiscal consolidation in both countries but, in …
22nd July 2022
The latest population projections released by the UN this week reaffirm that demographics will support strong GDP growth in Sub-Saharan Africa in the long run. But similarly robust income convergence is likely to remain a pipe dream. Chart 1: Total …
15th July 2022
Political risks take centre stage Resurfacing political risks in some parts of Sub-Saharan Africa are another threat to recoveries that are already facing multiple headwinds, while at the same time raising the pressure on several governments to provide …
8th July 2022
Recent inflation figures out of the region and remarks from central bank officials point towards more, and potentially larger, interest rate hikes in most African economies over the coming months. A key exception is South Africa, where the latest …
1st July 2022
Exposing corruption in South Africa The conclusion of a multi-year inquiry into corruption in South Africa and recent allegations of impropriety involving the president are likely to undermine his standing ahead of key party leadership elections, and also …
24th June 2022
Ripple effects of tighter global financing conditions African financial markets are not insulated from the tightening of global external financing conditions, and recent currency weakness and rising sovereign bond yields in the region will only add to …
17th June 2022
Nigeria’s presidential race: an uninspiring choice Nigeria’s two main political parties have selected presidential contenders, setting the scene for a long campaign season ahead of elections in February 2023. Lots can happen until then, but with more …
10th June 2022